Wednesday, March 12, 2014

When Will the Market Open?

Last week, the Washington
Liquor Control Board ("LCB") granted the first license to produce and
process marijuana for recreational use. The licensee, Sean Green of
Kouchlock Productions, will grow 21,000 square feet in his Spokane
facility. He reports that he’ll market starter plants to other producers
initially, and later expand to supply the retail market as it opens
this summer.

This announcement is slightly behind schedule, as
the LCB was expected to begin issuing producer/processor licenses in
February. By all accounts, the LCB was not prepared to handle the
volume of over 7,000 applications it received. After the recent policy change limiting producer applicants to only one
license, 900+ applications were removed from the list. However, this still leaves
almost 1,900 producer applications alone – and some of them have not yet
begun the review process.

Brian Smith, spokesperson for the LCB, set the expectation for a 90-day review period in a December Seattle P-I article:
“when you combine the extra work with the glut of applications within a
short application window you get the estimated 90 days for the average
application.”

Based on this statement, we should expect most
licenses to be issued next week for approved businesses that applied
during the window that closed December 20, 2013 . . . but don't hold
your breath.Hundreds of producer applicants are still
waiting for their initial contact from the LCB. It is likely only a
handful of producer licenses will be issued over the coming weeks.

Our
hope is that the LCB will provide the public with additional
transparency regarding the schedule under which the agency expects to
issue licenses for the producers, processors, and retailers, many of
whom have made significant investments in property and equipment.

LCB
representatives have noted that they expect the retail lottery to occur
in April and to begin issuing retail licenses in June/July. These
statements appear a bit aggressive, considering how slowly things have
moved thus far. We can speculate that the bulk of retail will
not open until late summer or early fall (August-October).

Likely,
the producer and processor licenses will trickle in over the coming 6
months, with the bulk of producer/processor licenses being issued also
in late summer and early fall (August-October).

At this point, our
best guess (with the limited information available) is that the
licensed recreational marijuana market in Washington will be in full
swing by December, 2014.